Canada's consumer price index expected to remain at 1.7% in May — FXStreet

FXStreet says Statistics Canada is set to release the consumer price index for May this Tuesday. Economists project the gauge will match April’s annual rise of 1.7%. However, May inflation is expected to accelerate by 0.5% from a month earlier, exceeding the 0.1% drop on a monthly basis in April. 

The Bank of Canada will also publish the core consumer price index. In April, the indicator went up 2.5% from the same month last year. 

Canadian central bankers said they intend to determine the impact of US tariffs on prices before adjusting rates. Market participants are now pricing in a 45% chance of monetary easing in July. By year-end, borrowing costs could be lowered by 36 basis points.

Bank of Canada Governor Tiff Macklem emphasized the difficulty of isolating US duties’ effects in key consumer price indicators. In addition, he said the statistical data monitored by the regulator already points to increasing input costs.